‘Why Nigeria must revisit PIA’

Femi Aborisade is a lawyer, former lecturer and consultant to many oil unions. In this interview with ROTIMI AGBOLUAJE, Aborisade discusses critical issues in the oil sector, including the Petroleum Industry Act (PIA), the failure of the government to revive state-owned refineries and the need for President Bola Tinubu to stem corruption in the oil sector.

What is your take on the Dangote Refinery, especially looking at the fuel crisis in Nigeria? 
There is nothing to celebrate or rejoice about in the launch of the Dangote refinery. Fundamentally, it is a sad reminder of how the government is ceding huge economic opportunities to the economic advantages of an individual. The oil wealth ought to benefit the general public through the refining of crude oil in government-owned refineries. The collapse of government-owned refineries is also a sad reminder of the ineptitude and incompetence of the APC-controlled Federal Government to run public refineries for the benefit of the masses of the Nigerian people. It is also a sad commentary on the corruption that characterises the oil industry. Investments worth over $20 billion have been committed to the Turn-Around Maintenance (TAM) of the government-owned refineries. Presidents after Presidents of the Federal Republic of Nigeria who have also made themselves Ministers of Petroleum Resources have failed to take the fight against corruption to the oil industry. Their failure suggests they are implicated in the cesspool of corruption in the oil industry. Rather than punishing perpetrators of corruption in the oil industry, different administrations have found it convenient to punish the masses by perennially imposing a hike in fuel prices rather than punishing those responsible for the collapse of government-owned refineries. The reality is that when wrongdoers are in power, wrongdoing cannot be fought. There is nothing to celebrate in the Dangote refinery. It is a reminder of the hijacking of public institutions to serve private interests rather than serving the public good. The launching of the Dangote refinery has not solved the twin crises of the unprecedented high price of fuel and fuel scarcity.

Nigeria has four government-owned refineries. How should the government handle these refineries?
Former President Muhammadu Buhari, in his pre-2015 election campaigns, addressed the question of how the government should handle public refineries. I agree with his standpoint. Former President Muhammadu Buhari campaigned on the programme of ensuring that existing public refineries would be revamped and new ones built to refine crude oil, not only to satisfy the domestic market but to also export. Unfortunately, former President Muhammadu Buhari could not implement his pre-2015 election vision throughout his tenure as President for 8 years, from May 2015 to May 2023. It appeared that the hands of former President Muhammadu Buhari were tied by big business in the oil industry.

How can the country solve perennial problems in the oil sector?  
From the point of view of the masses, it is of fundamental importance to advocate the repeal of the Petroleum Industry Act (PIA). The PIA establishes the Nigerian Midstream and Downstream Petroleum Authority, simply called the Authority, as the body to provide pricing and tariff frameworks for natural gas in midstream gas operations and petroleum products based on the market value of the applicable petroleum products. The authority now carries out the function of the PPPRA – Petroleum Products Pricing Regulatory Agency. The PPPRA was the body determining the pricing of petroleum products.

From the standpoint of organised labour and society, the establishment of the authority means that the influence of organised labour in curtailing price increases through the PPRA has now been effectively excluded. Before the PIA, organised labour, the central labour organisations and a few unions were represented in the PPRA, which had statutory responsibility for determining the prices of fuel. However, the Authority, in which organised labour is excluded, has now taken over that role. By Section 310(1)(a)-(f), and particularly Section 310(1)(f), which repeals the Petroleum Products Pricing Regulatory Agency (Establishment) Act No. 8 of 2003 (PPPRA), among other repealed laws, organised labour is no longer in a position to exert any statutorily sanctioned role to curb the tendency of the price of fuel to rise.

Indeed, the supply, importation and distribution of petroleum products, including premium motor spirit (PMS), are now firmly statutorily guaranteed in the hands of the private sector, including NNPC Ltd and effectively removed from the influence of the public, including organised labour.

The central problem with the PIA is that it is a neo-liberal piece of legislation that has now legitimised the privatisation process of the NNPC into a body to serve purely profit goals devoid of any public good. For the avoidance of any doubt, Section 53(7) of the Act asserts that there has been a complete paradigm shift in the orientation of the NNPC – from an entity for the public good to an outright business entity, without any pretence to serving any social good or public interest.

From the foregoing, the essential ultimate goal of the PIA is to take over the assets and interests of the NNPC and to facilitate the sale of shares or privatisation of the assets. This means the PIA is nothing but a neoliberal piece of legislation to rob or steal the wealth that belongs to all and hand it over to the private sector, ‘legitimately’, or ‘according to law’.

In that context, ordinary people in the host Communities and Nigeria have been robbed of a common patrimony, through the PIA.

Though the PMS pump price has been raised, some compared Nigeria’s price to those of other countries and fuel is cheaper here. How do you react to this? 
By Section 14(2)(b) of the Constitution, the constitutional measure of the performance of any government is the security and welfare of the people.
In the context of fuel pricing, the government has a duty not to maintain a price regime that subjects ordinary people to untold economic hardship. The constitutional measure of the performance of government is not predicated upon the comparative pricing of fuel in other countries. Oil wealth should impact the lives of the people positively rather than being used as a weapon to afflict hardship.

The NLC leaders said Tinubu betrayed them by increasing the pump price. Do you see a betrayal here?
I agree with the NLC leadership that President Tinubu betrayed organised labour. The sudden fuel price increase (from about N500/per litre to over N1000/litre) and increases in electricity tariff, the proposed increase of VAT (from 7.5 per cent to 10 per cent), and so on, have surpassed the grossly inadequate and unimplemented minimum wage increase from N30,000 (since 2019) to N70,000.

The fundamental implication for organized labour is to demand wage increases based on the principle of wage indexation, which means wages and salaries rising as inflation rises. If wage indexation policy guides wage demands, the government may be cautious about not implementing socio-economic policies which may arbitrarily and uncontrollably raise the cost of living.